Cashless Economy: Vietnam’s Goal for 2020

In recent times, transactions have become cashless. Many countries all over the world are now using plastic cards, or more commonly known as credit/debit cards, as a way of paying for services and commodities. In relation to this, Vietnam is aiming that by 2020, they will be able to have a cashless economy with people using plastic cards (such as those created by CardLogic), digital banking, and digital payment apps.

However, realizing this goal seems to be a little bit far. In the current times, only a little over 30% of the citizens in Vietnam own a bank account. The government, however, is looking for ways to get people to use credit cards or debit cards in their monetary transactions.

The Increase of Bank Users Over the Years

Vietnam is one of the economies that use cash payments in most of their transactions. Many people, especially in the rural areas oftentimes use cash to pay for their necessities. However, the number of people who are using ATM, debit, and credit cards have been slowly increasing as of 2017. The government aims to have more banks and other payment methods implemented in the rural areas. In this way, people will find it more convenient to use cards when paying. Using credit cards, debit cards, and digital banking has its own perks. People will no longer have to worry about being robbed.  Their money is more secured when they are placed into their bank accounts. They can just swipe their cards and the amount deducted from their accounts are exactly the amount that they would be paying for.

Changing the Way People Think About Credit and Payment Cards

Most people think that credit cards are dangerous and are more prone to hacks. But credit cards are not that bad. Most of the time, carrying cash with you is more dangerous than paying with credit cards. Cash can be stolen and you can never get the stolen money back. However, for credit cards, you can stop robbers from using your credit or debit card by reporting and blocking it at your bank.

Plastic bank cards are now equipped with EMV (Europay, Mastercard, Visa) – standard chips. These chips will help ensure the security of your bank account as well as protect you from fraud. Banks were mandated to change old credit, debit, and ATM cards since 2016.  The EMV chips aim to reduce the risk for e-commerce in both the buyers and sellers side.

The period 2014-2015 saw a 13% increase in the use of payment cards. This was driven by new technologies, increased e-commerce transactions, a stronger income of the middle-class, and the lesser presence of banks in the rural areas.

Digital Banking

Aside from plastic cards, the Vietnamese government aims to use digital banking as one of the payment methods in the country. With the help of smartphones and the internet, people can now have access to their accounts online. They can send money, pay bills and shop without using cash or cards.

The government has tapped several payment service providers to make digital banking much easier for the Vietnamese. They have set several incentives such as bonus interest rates for account deposits as well as discounts on bills payment. Banks have also created mobile applications to make it easier for their bank account holders.

A cashless economy may still seem a little far-fetched for Vietnam. However, with the help of the government and the financial sectors, people from rural areas, as well as the younger generation, will be able to experience the convenience and security of a cashless economy.